Grifols Shared Services North America Inc. has agreed to settle a lawsuit filed by an employee who claimed the company's 401(k) plan has several ERISA violations.
The settlement-in-principle notice was filed June 29 in a U.S. District Court in Los Angeles by attorneys for the plaintiff and defendants.
The document didn't disclose terms, adding that details of the class-action settlement would be provided by Aug. 31 to the court, which must approve the agreement.
The participant sued the drug company and its plan fiduciaries in April 2022. The parties subsequently sought mediation, leading to the proposed settlement, according to court records in Gruber vs. Grifols Shares Services North America Inc. et al.
The plaintiff accused the defendants of violating ERISA by requiring participants to pay "excessive" record-keeping fees, overpaying the plan's record keeper and overpaying the managed-account services provider.
Plan executives should have looked to replace Fidelity Investments, the record keeper, and Strategic Advisors Inc., the managed-account services provider, the lawsuit said. Neither is a defendant.
The lawsuit claimed defendants violated ERISA "by failing to employ a prudent process and by failing to evaluate the cost of the plan's recordkeeper critically or objectively in comparison to other recordkeeper options."
The lawsuit also alleged the plan's investment selection was mismanaged "by failing to engage in a prudent process for monitoring the plan's investments and removing imprudent ones within a reasonable period."
It also claimed that plan executives should have offered cheaper share classes, arguing that they "did not engage in an objectively reasonable search for and selection of the share classes that provide the lowest net expense ratio in numerous cases."
The Grifols Employee Retirement Savings Plan, Los Angeles, had assets of $1.17 billion as of Dec. 31, 2021, according to the latest Form 5500.